Legislature(2001 - 2002)

02/27/2002 01:33 PM Senate CRA

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
                                                                                                                                
            SB 278-TAKING PROPERTY BY EMINENT DOMAIN                                                                        
                                                                                                                                
KIM OGNISTY, Staff to Senator Torgerson, read the following                                                                     
sponsor's statement into the record:                                                                                            
                                                                                                                                
     SB  278  is  concerned  with   the  eminent  domain  and                                                                   
     declaration  of taking  proceedings  in Alaska  statute.                                                                   
     The bill  introduces a "reasonable and  diligent effort"                                                                   
     clause that attempts to place  the condemner of land and                                                                   
     the   private  landholder   in   an  equal   negotiating                                                                   
     position.  The   bill  is  not  trying  to   remove  the                                                                   
     authority  of  the  state to  acquire  land  by  eminent                                                                   
     domain or  in any  way complicate existing  proceedings.                                                                   
     Currently,  Alaska law  does  not require  the state  to                                                                   
     engage in a good faith effort  to negotiate with private                                                                   
     landowners.  Without an  incentive  to negotiate,  state                                                                   
     officials are  free to make  only an unreasonable  offer                                                                   
     or  none  at all.  They  can  end discussions  at  their                                                                   
     caprice  and they are  under no  obligation to take  the                                                                   
     landowner  seriously. Initiating  communication from  an                                                                   
     equitable  bargaining position  will promote  productive                                                                   
     negotiations,   facilitate    dialog   over   reasonable                                                                   
     concerns  and  encourage suggestions  from  all  parties                                                                   
     involved. The  phrase, "reasonable and  diligent effort"                                                                   
     or  similar language  has been  adopted by  at least  23                                                                   
     other  states. This  clause  will reduce  the amount  of                                                                   
     litigation  by encouraging more  cases to be  settled up                                                                   
     front thereby promoting expediency in government.                                                                          
                                                                                                                                
PHIL EVANS testified via teleconference  as the representative and                                                              
president of the Northgate Square  Mall in Fairbanks. He wanted to                                                              
tell about his  experience with land taking and  then his reaction                                                              
to SB 278. He read the following into the record:                                                                               
                                                                                                                                
     The  State  of  Alaska,  Department   of  Transportation                                                                   
     recently  took a portion  of my  commercial property  to                                                                   
     use for  a road  construction project.  I would like  to                                                                   
     make you aware of the experience  I had with them. Prior                                                                   
     to  condemnation being  filed,  the person  representing                                                                   
     the state was courteous but  misleading in attempting to                                                                   
     convince   me  to   accept  the   settlement  that   was                                                                   
     completely unfair. Also prior  to the condemnation being                                                                   
     filed,  the  state  appraiser   provided  no  meaningful                                                                   
     information.   She  was   quite   insistent  about   her                                                                   
     authority to be  on my property and utilized  a space in                                                                   
     a  business  in  the  mall   for  her  office.  She  was                                                                   
     deceptively courteous  and misleading in her  attempt to                                                                   
     promote an unfair evaluation of the property.                                                                              
                                                                                                                                
     The  state  did  not  provide  me with  a  copy  of  her                                                                   
     completed appraisal  record and market data  book. I was                                                                   
     unable  to   settle  with  the  state,  based   on  that                                                                   
     appraisal, because of the compensation  being inadequate                                                                   
     and unfair. The  appraisal did not fairly  set forth the                                                                   
     value  of  the  taking  and   the  consequences  to  the                                                                   
     remainder  property. In  the appraisal  of my  property,                                                                   
     the "before the  taking" value was based  on the current                                                                   
     use of  the property  rather than  the highest and  best                                                                   
     use  of that  property.  The  following items  were  not                                                                   
     fairly  considered  when analyzing  the  affects of  the                                                                   
     right-of-way  taking on  my property:  loss of  parking,                                                                   
     change  in  highest  and best  use,  decline  in  market                                                                   
     appeal, change in business use  of the property, decline                                                                   
     in market value.  But when it became apparent  the state                                                                   
     was  misleading and  unfair in their  attempts to  reach                                                                   
     settlement,  I hired  an attorney  and  an appraiser  to                                                                   
     provide  me   accurate  and  fair  counsel.   The  state                                                                   
     appraiser  concluded  that  just  compensation  for  the                                                                   
     property  taken and damages  was $80,000. The  appraiser                                                                   
     for  Northgate  Square  and myself  concluded  the  just                                                                   
     compensation  for  the property  taken  and damages  was                                                                   
     $676,000, eight  times more than the  state's appraisal.                                                                   
     As a consequence,  we proceeded to hearing.  Frank King,                                                                   
     an  appraiser, was  appointed  by the  state to  preside                                                                   
     over  the  masters hearing.  At  the conclusion  of  the                                                                   
     hearing, Mr. King rendered a  decision awarding $324,000                                                                   
     for  property  taken  and  damages.  Although  this  was                                                                   
     approximately  half  of  the amount  sought,  I  decided                                                                   
     rather than  continue with  litigation, I would  settle.                                                                   
     The state  subsequently appealed.  The  state's decision                                                                   
     to  appeal will  significantly increase  costs not  only                                                                   
     for me, but also for the state.                                                                                            
                                                                                                                                
2:05 p.m.                                                                                                                       
                                                                                                                                
He said SB 278 is encouraging, but he would like to see more                                                                    
change. He feels the state is able to totally take over private                                                                 
property with no respect or concern for the rights of the owner.                                                                
                                                                                                                                
RON WOLF,  Sealaska Corporation  Corporate Forester,  testified in                                                              
favor  of the  bill. They  had some  suggestions  on the  language                                                              
concerning how  the bill defines "reasonable and  diligent effort"                                                              
but it could be brought up in the Judiciary Committee.                                                                          
                                                                                                                                
CHAIRMAN TORGERSON agreed.                                                                                                      
                                                                                                                                
There was no further testimony.                                                                                                 
                                                                                                                                
SENATOR KELLY made a motion to move SB 278 from committee with                                                                  
individual recommendations.                                                                                                     
                                                                                                                                
There being no objection, SB 278 moved from committee.                                                                          

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